According to the Huduma Namba Bill, 2021 set to be tabled in Parliament on Tuesday, December 21, the government plans to widen the tax bracket with the new laws.
Govt's plan to replace KRA Pin set in motion
The government has kicked off a plan to replace the Kenya Revenue Authority PIN with the Huduma Namba.
If passed, everyone above 18 years old enrolled on the Huduma Namba will be required to file tax returns.
"Huduma Namba assigned to an individual under the Huduma Act, 2021 shall serve as PIN for the purpose of tax law," reads the bill in part.
Children who are enrolled on Huduma Namba will automatically have their tax obligation activated upon attainment of 18 years.
Currently, Kenyans voluntarily apply for KRA pin on a demand basis such as for employment, opening a bank account or starting a business, meaning that many who may not need it don;t apply.
In June 2021 only 5.5 million Kenyans filed their tax returns, against an adult population of 25.64 million.
This comes as the government also plans to phase of the current ID for the Huduma Namba which will become compulsory.
"On completion of initial enrolment of resident individuals under the Huduma Act, the Commissioner (KRA) shall activate tax obligation of every resident individual above the age of eighteen years not registered as a taxpayer," the Bill states in consequential amendments to several Acts of Parliament.
KRA has been under pressure to meet its tax targets amid a recovering economy and cash crunched government.
In 2021, KRA defied all odds to surpass its revenue target after eight years, with a new record collection of Sh1.669 trillion.
The tax collector surpassed its Sh1.652 trillion targets with a surplus of Sh16.808 billion.
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